Greenspan: Global urgent need to prevent potential "stock market crash".

<P>: Http://finance. Information to the global excess liquidity, stock prices have continued to soar when the mouth, the former Federal Reserve Chairman Alan Greenspan again warned that global interest rates is generally low. .Last week for its upcoming new book released in September this year, "the turbulent times: the adventures of the New World" for publicity, Greenspan warned that the global interest rates are low, and policy makers to take preventive measures against potential stock market crash, and he .very optimistic about economic prospects in Europe. .</ P> <P> Greenspan said the U.S. interest rates low, which is a common phenomenon in the world, and even many developing countries is also very low interest rates, which makes him by surprise. .He pointed out that the global economy is experiencing "unusual" environment. .Greenspan pointed out that in 1987, and "9-11" stock market crash to his most profound lesson is that these incidents are often unpredictable, the global decision-makers should not use monetary policy to prick asset price bubbles, but should take preventive .measures to strengthen the market to absorb the potential instability of the buffering capacity. .</ P> <P> Organization for Economic Cooperation and Development (OECD) report last month, also pointed out that the current global interest rates too low to reflect the market supply and demand situation, contributed to the increase in leveraged finance activity and asset prices .. .The OECD also called for central banks around the world, especially Asian countries central banks to adjust monetary policy. .</ P> <P> report, financial institutions and leveraged finance investors should be fully aware of the risks, they should have sufficient capital to cover possible losses. .The report said very active when the leveraged finance, the central bank's monetary policy makers should be to attract attention, because historical experience shows that such activities are often devastating results. .The current level of real interest rates may be too low, which makes the hedge funds and private equity groups take advantage of the benefits of leveraged finance. .</ P> <P> report that if the low interest rates led to excess liquidity, leveraged finance investment will eventually lead to bad results. .Similarly, if the cost of capital is too low, too high stock prices will bubble risk. .</ P> <P> reports that China's huge foreign exchange reserves invested in U.S. bonds, which makes the level of U.S. interest rates lower than expected. .Bank of Japan's low interest rate policy is spawned countless arbitrage trading activities. .</ P> <P> the Fed should cut interest rates this year? .</ P> <P> compared with the European Central Bank, the world's largest economy to U.S. interest rates is less clear. .Last week, before the Fed released minutes of a meeting on interest rates, in which the expression of the full economic outlook optimistic, while still maintaining the inflation hawks on the attitude of the authorities once the market may discourage interest rate cut expectations. .</ P> <P> last week, the U.S. posted strong May employment data and manufacturing data, etc. However, the survey shows that there are still many traders expected the Fed to cut rates eventually. .Reuters survey released last week, all 21 respondents in the U.S. primary dealers expect the Treasury, the Fed will be June 27 to 28 at the next meeting on interest rates to keep interest rates unchanged at 5.25%. .But for the next interest rate move, 15 dealers surveyed expect next step is to cut interest rates, is expected to cut interest rates time was different, the four considered to be in August, three known until next year. .Since last June, the Fed has kept interest rates unchanged at 5.25%. .In the previous two years time, the Fed is raising rates 17 consecutive times by 25 basis points. .</ P> <P> UBS expects the United States might cut interest rates in October this year, rather than expected in August before. .However, this does not seem sure that the financial markets. .Interest rate futures showed the U.S. Federal Reserve cut interest rates before the end of the probability of only 18%, 80% two weeks ago. .</ P>.